Ninth District communities continue to argue over the wisdom of hosting hardrock mines. Do small towns strike it rich with metal mining or do they simply get the shaft?

Residents of Noxon, Mont., all agree that their town is small, poor and
blessed with some of the most breathtaking natural beauty in all of northwestern
Montana. But on the central issue facing Noxon's future, there is very
little harmony. The Sterling Mining Co. is proposing to sink a deep-shaft
copper and silver mine near their town, and that prospect is fracturing
the community long before the first drill pierces the earth.

"I just think the whole thing is positive, said Betty Hoge, owner
of the Mercantile, Noxon's main grocery store. Hoge moved to Noxon five
years back and says it's "absolutely gorgeous." But the economy
is depressed and people need the jobs Sterling's mine could provide. "We
need to have employment for the people," said Hoge. "They're
talking about 300 to 350 jobs if the mine goes through.

Kathy Slora sees things differently. "I absolutely do not want to
see the mine come in," said Slora, who runs a sawmill in Noxon. "[Our
sawmill] would probably benefit economically from the mine, as far as
the purchase of timbers and that sort of thing. But for me the
trade-off isn't worth it." Slora doesn't think Noxon could handle
the population spurt that might accompany the mine operation. "That
would put an impact on our schools. There's just not enough housing available
here. We're just such a small community that I don't see where we could
support such an influx."

Slora is also deeply concerned about environmental risks. A
self-described "avid hiker" who treks weekly in the nearby
Cabinet Mountains Wilderness Areaunder which Sterling's mineshafts
would burrowshe worries that the drilling and blasting would
harm the natural splendor. "I just don't want to see these
mountains destroyed."

But Hoge is impatient with such talk. She feels the economic benefits
should carry the day. "We have these environmentalists who
talk about the bull trout and whatever, these little people that
have to wag their tails and tongues, you know," she said. "Well,
it really bothers me, because we need the mine here terribly."

Long-term controversy

The fate of Noxon and the Sterling mine will continue to be debated by
its residents and others for many years to come. Indeed, the controversy
has already been 14 years in the making, since prospectors began to develop
proposals and file for permits, and government officials proceeded with
studies and community meetings. Things heated up last December when the
U.S. Forest Service and the Montana Department of Environmental Quality
gave Sterling permission to proceed with the mine, and environmental groups
promptly filed a lawsuit to stop it.

The mine raises issues of national import because it puts at odds two
federal laws: the 1872 General Mining Law, which allows that mining is
the highest use of all federal lands, and the Wilderness Act of 1964,
which says that designated areassuch as the Cabinet Mountainsshould
be "untrammeled by man." Sterling officials say the mine won't
trammel the surface, just the interior, since the actual mine entrances
will be located outside the wilderness boundary. And federal authorities
say they're powerless to stop a mine from going in because the 1872 Mining
Law gives priority to mine claims. A Clinton administration ruling permitted
officials to veto mines that they felt posed undue environmental risks,
but the Bush administration rescinded the ruling last fall.

But beyond the issue of federal laws, the Sterling mine raises issues
germane to mining throughout the Ninth District: What are the costs and
benefits of mines to local communities? Do they inject more than they
extract? While hardrock mining isn't the growth industry it once was,
a number of towns in the region face tempting offers from mining companies
like Sterling, and weighing the pros and cons is tougher than it might
seem.

Driving Wisconsin

"An important economic driver" is the phrase Gov. Scott McCallum
of Wisconsin used in mid-September to describe a proposed zinc and copper
mine near the town of Crandon, in northeastern Wisconsin. McCallum was
explaining why he had rejected a proposal to buy the Crandon mine site
from Nicolet Minerals Co., its current owner, a suggestion that local
conservation groups and tribal governments had made in June as a means
of preventing the environmental damage they fear the mine will create.

The purchase price for the land and its mineral rightssomewhere
between $51 million and $94 millionwould be too high, said McCallum,
but he also believes a buyout would have stopped a project that could
create much-needed jobs. "Many Crandon-area citizens," said
McCallum, "have serious reservations about the possible loss of jobs
if the state were to acquire the Nicolet property."

The Crandon mine, projected to extract 55 million tons of zinc and copper
ore, has been the subject of acrimonious debate for over a quarter of
a century. The buyout would have settled the war but, as McCallum highlighted,
it would also have eliminated the prime attraction of the mine to local
and state economies.

"Forest County is currently the second poorest county in the state
of Wisconsin, with a very high poverty level," observed Dale Alberts,
president of Nicolet. "They need economic development." Alberts
estimates that the mine would employ up to 700 people during the three-year
construction period and then about 400 during its 28-year lifespan. The
mine's direct contribution to the area in wages, taxes and purchases would
be about $1.5 billion over the life of the mine, he says. "And typically
a project like this in this kind of setting will have an economic multiplier
somewhere between 2 and 4," he added. "So you can imagine the
size of the contribution to the local economy."

State labor leaders are impressed with the potential of the project. "That's
an economically depressed area, okay, and well-paying jobs would suit
that area very well," noted Michael Ryan, president of the Wisconsin
Laborers' District Council in Madison. "Of course, being a labor
organization, we're interested in well-paying jobs." Several local
mayors and city administrators have also backed the mine and voiced strong
objections to the state buyout proposal.

Critics of Crandon

But other local leaders are convinced that the Crandon mine is a terrible
idea, on economic grounds. "I don't think that the local folks who
really need it here would ever get any of those [mine] jobs," said
Chuck Sleeter, town chairman of Nashville, where part of the ore body
is located. "I think it's the union fellows that are wanting those
jobs ... and I hope they understand that this is a boom-bust industry."
Sleeter is concerned that the busts would have severe impacts on Nashville.
"This is a rural community up here and it's very difficult for us
to support a community of unemployed miners."

Sleeter is also worried that during the boom cycle the mine will require
substantial community expenditures that might not be supportable in the
long run. "A mining company comes in and promises all kinds of jobs
and economic development and if you look just at the surface, that's a
great thing," he said. "But as you look underneath that surface,
you look at how the town is going to have to improve infrastructure, build
roads, build a fire department, increase law enforcement." If the
mine shuts downtemporarily or permanentlythe community is
saddled with debt, said Sleeter. "And what does the town of Nashville
do now? Who pays the property taxes? Who pays for this infrastructure?"

To address such boom-bust problems, Wisconsin has designed a Mining Impact
Program (MIP) that funds projects in communities affected by mines from
a special mine revenue assessment. The town of Ladysmith, Wis., used MIP
funds extensively in the 1990s to prepare for the 1997 closure of its
short-lived mine, and town administrator Al Christianson vouches highly
for the program's effectiveness.

But Sleeter hopes instead to develop a diversified, sustainable economic
base without relying on a mine or the MIP and has joined with leaders
of several local American Indian communities to develop a rural enterprise
community that capitalizes on the area's tourism potential. "What
we in the town of Nashville are trying to do is to enhance what we have,
and that is a renewable tourist industry," he said.

Thomas Powers, chair of the economics department at the University of
Montana-Missoula, said that mines do, indeed, have both positive and negative
economic impacts on local communities. "The primary pro, from the
point of view of the community, is the high pay," he said. "The
other big pro is that the mine and equipment associated with mining activity
add considerably to the tax base, so the local government becomes a partner,
really, in the economic development of the mine."

The Forest County Board, for example, strongly objected to the proposed
state buyout of the Crandon mine because the county would lose at least
$200,000 annually in property tax revenue and $620,000 from selling 1,000
acres of county land to Nicolet Minerals. "Local governments tend
to salivate strongly at the idea of a modern mine," noted Powers.

Confronting the puzzle

But Powers said that mines tend not to bring as much economic benefit
as local officials often expect, and mining communities tend not to prosper.
"There's just the basic empirical fact that communities and counties
that are dependent on mining are not prosperous in terms of average levels
of income, unemployment rates, rates of economic growth whether measured
in terms of employment or income," he observed. "Whatever the
high pay and the enhanced tax base does, it doesn't support local economic
prosperity, and that's a puzzle that people have to confront."

Powers and other economists suggest that modern mineswhose profitability
is determined by volatile international commodity marketstend to
have a "flickering" character: prosperity when prices are high
and the mine operates full-bore, followed by hardship when prices fall
and the mine lays off workers.

Moreover, the high wages and possibility of being rehired often convince
unemployed miners to stick around rather than pursue other possibilities.
"When workers get laid off, they don't leave right away," noted
Powers. "It doesn't matter whether it's a coal mine, copper mine
or even a metal smelter, in these areas that are dependent on mining you
find higher rates of unemployment simply because people don't make the
adjustments they would if they got laid off at Wal-Mart or some high-tech
company."

Al Gedicks, a sociologist at the University of Wisconsin-La Crosse and
a long-standing critic of the Crandon mine, agrees that mining communities
often fare poorly. "If you look at the most recent sociological literature,"
he said, "mining communities always have higher rates of poverty,
higher rates of unemployment, higher rates of social problems [like] alcoholism,
suicide, spouse abuse, violence in families."

Ladysmith's luck

Quite an indictment, and not a view shared by all. Christianson of Ladysmith,
Wis., which was home to a copper, silver and gold mine between 1993 and
1997, is convinced that the mine helped revive the town's fortunes. "Without
question it was a benefit," he said. "I wish it were still in
operation. In the very short time it was here we were able to almost move
in the direction of economic normalcy. ... But of course it closed down
and then things began to slowly revert back to their previous state here."

Ladysmith's mine, a small open-pit operation built just 140 feet from
the Flambeau River, was highly controversial when first proposed, and
protests at community meetings turned ugly. Mine critics, including Gedicks,
predicted it would ruin the environment and the town, and they pushed
hard for safeguards and restrictions, including a refusal to host a smelter:
The ore was taken by rail to Canada for processing.

Today, five years after the mine's closure, many townspeople say it's
too bad the 75 jobs it generated aren't still around. They also speak
highly of the Flambeau Mining Co.'s generosity, pointing to the new public
library built with the help of a $500,000 company contribution and to
playground equipment donated to the elementary school. "They've given
us quite a lot of money," said Chuck Frey, a barber in Ladysmith.
"Of course, a lot of people think we ought to have gotten more, but
pretty soon there ain't no profit in mining."

Frey is glad that the smelter was defeated because it would have caused
too much pollution. But he has a rather cynical take on how opposition
on other issues was stifled. "They don't have to pay too much attention
to the opposition if they don't want to," he said of the mining company.
"What they do is they buy it off. They make it economically feasible
for the town, and a lot of people give up."

But some local residents continue to fear that Ladysmith's pit minenow
restored as an attractive nature preservemay begin to leak acid
and other contaminants into the Flambeau River. State officials say the
mine has not violated any environmental standards, but others say leaks
are inevitable. "Maybe I won't live long enough to see it,"
said 86-year-old mine opponent Roscoe Churchill. "But I've studied
enough mines to know that it's not a matter of if, it's a matter of when.
It's a kettle of poison and eventually it's going to find its way into
the Flambeau."

Environmental values

As Churchill and others suggest, the natural environment itself is a
key economic asset in many Ninth District communities. And many economists
agree that environmental damage can degrade the substantial aesthetic
and use value of rivers, mountains and countrysides (relatively) untouched
by industrial activity.

The benefits that a mine can bring to a community should be weighed against
possible risks to the economic value of the area's natural environment,
said Powers, the Montana economist, and he believes the trade-off usually
isn't worth it. "A typical mine provides a couple of hundred jobs
for 10 years and leaves an incredible toxic waste behind," he said.
"So then the question is why, in these high-amenity areas, in the
pursuit of a week's worth of normal job growth, would you make this permanent
sacrifice that undermines the very source of your current economic vitality?"

Powers argues that the economies of Montana and other states are coming
to rely less on extractive industries that were dominant in the past and
more on tourism, retirement economies and knowledge-based industries whose
workers will be drawn by natural amenities. Among the most vocal opponents
of the Sterling mine, for instance, are tourism and real estate interests
in Idaho, whose businesses depend on the area's scenic beauty and clear
rivers. The mine would discharge up to 3 million gallons a day of treated
wastewater into the Clark Fork River, which flows across the border into
Idaho's Lake Pend Oreille. Endangering that tourist area's environment
in exchange for the gains of metal mining is to sacrifice future wealth
for present subsistence, in their view. Or as sociologist Gedicks put
it, "How many people do you know want to spend their retirement next
to a polluted stream?"

Of course, the mining industry these days has a much-heightened sensitivity
to the environmental consequences of its activities. Its leaders have
publicly committed themselves to run clean operations. "We've gone
the extra mile with the technology and with the willingness to build what
in my opinion would be the best mine in the world, from an environmental
performance and compliance point of view," said Alberts of Nicolet
Minerals.

Groundwater that leaks into the Crandon mine, for example, would be run
through "double-pass reverse osmosis" and evaporation condensation
to produce "pharmaceutical grade water," said Alberts, before
it's discharged back into the groundwater system. A $30 million cement
grouting system would seal off leaks and reduce the amount of water that
gets into the mine in the first place. "It can and will be done safely,"
he promised, in an early September interview.

Not panning out

But in fact, it may not be done at all. Less than a week after celebrating
the state's Sept. 13 decision not to buy out the Crandon mine, local mine
boosters were stunned to learn that Nicolet's Australia-based parent company,
BHP Billiton, had decided to sell the property anyway, saying it preferred
to concentrate on more lucrative deposits elsewhere in the world. It was
a stark confirmation of the flickering character of hardrock mining and
the inherent risks of pinning a community's hopes on a volatile international
industry. Whether another mining company will pursue the Crandon site
isn't known as this article goes to press, but Alberts said Nicolet will
continue to seek state permits for the mine so that a future owner could
proceed in an environmentally sound manner.

The Crandon mine may or may not be dug some day, but as local leaders
consider the future of that mine and others in the Ninth District, the
central question will remain: Will the mine stay open and operate cleanly,
or will unforeseen financial or geological events leave disappointment
in their wake?

In Noxon, mine opponent Slora says the mining company can't be trusted.
"Sterling, the company that owns the mining rights now, has such
a terrible track record as far as going in, developing a mine and then
declaring bankruptcy and leaving a huge mess behind them. They've done
it over and over again. And this community does not need Sterling's mess."

Slora is referring, in part, to Sterling's chief executive officer, Frank
Duval, who helped found Pegasus Gold and consulted with it in the 1980s.
Pegasus went bankrupt in 1998, leaving behind several multimillion dollar
mine reclamation projects in Montana and elsewhere for which taxpayers
will pay.

But Duval, who left Pegasus well before it declared bankruptcy, said Sterling
"understands the sensitivities associated with this project and the
Cabinet Mountains Wilderness, and commits to conducting our activities
to minimize impacts to the wilderness. ... All of the analyses ... clearly
demonstrate there will be no catastrophic impacts to lakes and streams."
Duval also points to the new, innovative technologies Sterling will be
using, saying they guarantee environmental safety.

Noxon resident Hoge has faith that things will be done well. "I don't
know all the ins and outs of it, or how they do their dumping or whatever,"
she said, "but I know that they're going to be safe. I know they
are."

"Kind of a guinea pig"

Travis Wilson is still trying to make up his mind. A father of two young
boys, he's a logger and home builder in Noxon who did some mining himself
when he was younger, core drilling at the Golden Sunlight Mine near Whitehall,
Mont. The Sterling mine would bring more people to town, said Wilson,
and that would help out the local economy, boosting the local housing
market among other things. But mining companies usually bring their own
experienced employees in from other mines, he observed, "so any jobs
they hire from around our area are going to be bottom-end, lower-paying
jobs."

And Wilson has other concerns. "The area that they're gonna put the
mine in is our hunting and fishing area," he said. "So that
really puts a big damper on a lot of that, especially if they have problems
like most of the mines dothe pollution problems, the chemical spills
everywhere and everything that goes along with that."

On balance, he's not so sure the benefits outweigh the potential risks.
"You know, you get more people and you get a few jobs, but on the
other hand, you're bringing in more problems and you're hurting the environment.
It's really kind of a Catch-22 there."

He'd like to trust the company to do the job right. "If they get
their act together and they can assure that it's gonna be a clean operation,
great. But it's a new technique they want to try up there, so we're kind
of a guinea pig. And what happens if it all goes wrong?"